SDX makes Egypt oil discovery
SDX Energy (SDX:AIM) 52p
Gain to date: 35.9%
Original entry point: Buy at 38.23p, 2 February 2017
North African oil and gas producer SDX Energy (SDX:AIM) is heading in the right direction again after announcing a discovery on its West Garib concession, onshore Egypt.
The Rabul 2 well looks to have identified a larger find than that delivered by the Rabul 1 well drilled in July, with 105.1 feet of net pay.
A reservoir or portion of a reservoir which contains oil or natural gas economic to produce is known as ‘pay’ as it is literally capable of ‘paying’ an income. Net pay is what is left after applying further criteria such as how much oil can pass through the rock in the sub-surface.
The remainder of the year is likely to see focus switch to Morocco where the company plans to drill seven wells. Five development wells will be drilled on the already-producing Sebou permit and two exploration wells will be drilled on the Lalla Mimouna permit.
Cantor Fitzgerald analyst Sam Wahab says: ‘All locations in the Sebou permit are adjacent to existing infrastructure and therefore we believe the wells can be placed on production quickly in a success case.’